Is A State-Run Health Insurance Marketplace Still In Arkansas's Future?

The US Supreme Court ruling on Affordable Care Act subsidies has added clarity to the ways in which federal assistance for health insurance premiums can reach Arkansans earning 138 percent to 400 percent of the poverty level and shopping for insurance through a healthcare marketplace. But it has not settled the issue of whether Arkansas will continue to utilize a federally facilitated marketplace, such as healthcare.gov, or continue to build up to a planned 2017 launch of a state-run exchange.

Justices ruled 6-4 on Thursday that federal tax credits can flow either through state-run exchanges or federally facilitated exchanges. 34 states rely on the federal system.

In 2013 the Arkansas Legislature voted in a bi-partisan fashion to form the Arkansas Health Insurance Marketplace Board to plan for a shift to a state-based marketplace in 2017. Federal funds and initial approval have already been obtained. Final approval from state lawmakers is required for the switch.

Prior to the rise of the King v. Burwell case backers of the legislation contended the shift from a hybrid, federally facilitated exchange to the state-run exchange would give Arkansas officials more authority and flexibility in implementing the federal health care law. Opponents say it is a costly endeavor, holds only a limited promise of greater state-level authority, and further entrenches a federal health care law they oppose.

Governor Asa Hutchinson (R) issued a statement following the ruling that included a word of hesitation on shifting to a state based health insurance marketplace.

“I am surprised at the lengths to which this court will go in an effort to stretch statutory interpretation to uphold the Affordable Care Act. The decision is disappointing. For now, the court’s decision maintains the status quo. In terms of what this means for Arkansas, we will continue our work with the task force to find innovative solutions for Medicaid and healthcare reform. I am convinced now more than ever that we need to proceed with caution to measure the costs to the taxpayers and the reliability of the outcome as we consider the potential of a state exchange.”

Democratic Minority Leader Keith Ingram, a state senator from West Memphis, says he’d “like to think” the decision means the Legislature will act with the assumption that the ACA is here to stay. Ingram pointed to arguments used by Republicans in 2011 to stop the state from setting up its own healthcare marketplace.

“I remember vividly that the reason they killed it was they thought the ACA was going to be found unconstitutional then by the Supreme Court. Now, we’ve had two challenges that have withstood it. My hope is that we can all move forward together,” Ingram said.

“When the Republicans did not want to establish a state exchange and force us into a federal exchange that was even counter intuitive for me of Republican positions,” said Ingram. “I’ve always thought they believed smaller government was better,.”

Republican state Senator Eddie Joe Williams of Cabot, who was the majority leader in 2013 and 2014, says lawmakers should still be wary of making changes that further immerse the state in the framework of what he calls “Obamacare.”

“I don’t think it’s the final nail in the coffin. I think there will be other litigation. I think there are some that still want to continue to push back. Obviously, there are some hoping that we have a change of administration,” said Williams.

Fellow Republican state Senator John Woods of Springdale has a markedly different take than Williams but also opposes the President’s signature healthcare law.

“You have to make that decision. Do you make the best of it or do you just let the federal government do it. I think us trying to tackle it as a state is in our best interest, to handle it at the local level,” said Woods.

Woods was part of a bi-partisan coalition that pushed the Arkansas Health Insurance Marketplace Board through the 2013 session. He has also supported the state’s federally-approved alternative to Medicaid expansion, known as the private option, which has provided insurance to 250,000 low-income Arkansans.

Williams doubts what some tout as the potential for added flexibility and local control in a state-run exchange, "at this point I’m not sure what’s the benefit. I’m not sure there will be much more state control."

Williams, Woods, and Ingram spoke to KUAR at the annual meeting of the Arkansas Municipal League in Little Rock. The Arkansas Health Insurance Marketplace Board directed inquiries to the governor's office.

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Thursday's decision by the U.S. Supreme Court that subsidies for the Affordable Care Act, also known as Obamacare, are legal means that in Arkansas, nearly 70,000 Arkansans will continue to receive assistance.

The state currently runs its exchange in a partnership with the federal government. Middle-income people purchasing insurance on the exchange receive average monthly subsidies of $284, according to Kaiser Health News and NPR.

It’s possible that by Thursday, a U.S. Supreme Court decision will result in 68,232 Arkansans losing insurance subsidies provided through the Affordable Care Act, otherwise known as Obamacare. If that happens, state policymakers will have to decide how to respond.

A section of the Affordable Care Act – called a 1332 waiver – is being hailed by one of the legislative architects of the private option and the director of the Arkansas Health Insurance Marketplace Board as a path toward consensus in a Legislature riddled with uncertainty over healthcare.